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A non-parametric decomposition of redistribution into vertical and horizontal components

Perrote, Irene and Rodríguez, Juan Gabriel and Salas del Marmol, Rafael (2001) A non-parametric decomposition of redistribution into vertical and horizontal components. [Working Paper or Technical Report]

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Abstract

We apply non-parametric methods to construct an index to measure horizontal inequity (HI). The
index tackles the problem of arbitrary definition of similar individuals, and has important normative
properties: HI is measured by the distance between the Lorenz curves of estimated and actual post-tax
income distribution. This incorporates an ordinal view of HI. Moreover, the total effect of a tax system can
be decomposed into welfare gain due to income redistribution free of HI and welfare loss due to HI.
Indices such as in Aronson et al. (1994) and Lambert and Ramos (1997) can be seen as particular cases.

Item Type:Working Paper or Technical Report
Additional Information:JEL Classification: H23, D63, D31 and C14.
Uncontrolled Keywords:Modelos econométricos, Vertical redistribution, Horizontal inequity, Social-welfare and nonparametric estimation.
Subjects:Social sciences > Economics > Econometrics
Series Name:Documentos de Trabajo de la Facultad de Ciencias Económicas y Empresariales
Volume:2001
Number:07
ID Code:6731
Deposited On:30 Nov 2007
Last Modified:06 Feb 2014 07:50

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